In his preliminary take on the employment report, under the great title “Steady path to disappointment”, Ryan Avent shows this chart:
The blue line shows the year-on-year rate of employment growth. New revisions do little more than keep the present growth rate on the track it´s followed for the past two years. And that track is consistent with only a very slow decline in the rate of unemployment (the red line), which the Fed reckons will return to something like the normal rate by late 2015, if we’re lucky.
America needs the red line to fall faster. But that will take an upward shift in the blue line.
But what will give the blue line an upward shift?
The chart below brings the growth of nominal spending (NGDP) into the picture. It´s clear that the blue line will only shift up (and the red line come down) if spending growth (green line) also shifts up.
Bernanke, your decision.